Visa inc.: accounting for marketing Harvard Case Solution & Analysis

Marketing Strategies:

Visa Inc. markets its products and services through media advertising as well as through sponsoring well renowned events including Olympics and FIFA world cups. This marketing strategy helps the company to attract the customers of the company towards the brand.

Furthermore, it is also depicted that the top management of the company has spent a large sum on marketing its products and services in the financial year 2013. This shows that the top management of the company extensively focuses on marketing its products and services.

The increase in marketing expenditures also increases the overall revenues of the company by a widespread margin. This further depicts that the top management of the company is doing marketing of its products and services efficiently and effectively, which is directly increasing the overall revenues of the company as well as the overall profitability of the company.

Financial Analysis:

The financial statements of the company depict that the operating revenues of the company has been increasing over the period of time.This further shows the efficiency of the top management of the company in increasing the overall growth of the company.

The financial statements of the company also depict that the net income of the company is also increasing over the period of time. This further depicts the overall efficiency of the company in controlling the overall costs of the company efficiently and effectively.

The total liabilities of the company have been decreased in the financial year 2013, as compared to that of the financial year 2012. This shows that the company is avoiding debt financing, which is also reducing the interest expense of the company.

Ratio analysis:

Time Period

9/30/2013

9/30/2012

9/30/2011

9/30/2010

9/30/2009

Sales Growth

11,778.00

10,421.00

9,188.00

8,065.00

6,911.00

Growth in Sales Revenues

13%

-12%

-12%

-12%

-14%

The above mentioned chart shows that sales have been robustly grown in the financial year 2013, as compared to financial year 2012. This depicts the overall efficiency of the management in running the business operations efficiently and effectively.

Time Period

9/30/2013

9/30/2012

9/30/2011

9/30/2010

Long term Finance

$9,086

$12,383

$8,323

$8,394

Equity finance

$26,870

$27,630

$26,437

$25,014

Gearing Ratio

34%

45%

31%

34%

The a fore mentioned chart shows that the top management of the company is resorting towards equity financing rather than debt financing, which strengthens the overall financial position of the company.

Time Period

9/30/2013

9/30/2012

9/30/2011

9/30/2010

Operating profit before I&T

18

68

200

49

Interest

$0

$2

$4

$2

Interest Cover-

34

50

25

The above table depicts that there is no or negligible interest expense in the financial year 2013. In addition to this, it also shows the decline in operating profits of the company, which depicts the inefficiency of the top management of the company.

LIQUIDITY RATIOS

Description

9/30/2013

9/30/2012

9/30/2011

9/30/2010

9/30/2009

Current assets        7,822      11,786         9,190        8,734       9,241
Current Liabilities

        4,335

        7,954

         3,451

        3,498

       4,442

Current ratio

1.80

1.48

2.66

2.50

2.08

Description

9/30/2013

9/30/2012

9/30/2011

9/30/2010

9/30/2009

Current assets        7,822      11,786         9,190        8,734       9,241
Inventory

           521

           151

            129

           197

          125

Current Liabilities        4,335        7,954         3,451        3,498       4,442
Acid Test Ratio          1.68          1.46           2.63          2.44         2.05

The liquidity ratios of the company are increasing over the period of time.This shows that increase in the ability of the company to readily pay off its current liabilities by using its current assets efficiently and effectively......................

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